1)
Refer to the long-run cost diagram for a firm. If the firm produces output Q2 at an
average cost of ATC3, then the firm is:
A.producing the profit-maximizing output but is failing to minimize production costs.
B.incurring X-inefficiency but is realizing all existing economies of scale.
C.incurring X-inefficiency and is failing to realize all existing economies of scale.
D.producing that output with the most efficient combination of inputs and is realizing
all existing economies of scale.
2) Which market structure best characterizes the various Internet markets?
A.Differentiated oligopoly.
B.Homogeneous oligopoly.
C.Monopolistic competition.
D.Pure monopoly.
3) So-called business cycles refer to the multi-year periods:
A.From when new products are launched to the point when they become obsolete
B.Between the purchases of new capital equipment and the point when they become
junk
C.From the origination of a business loan to the retirement or full repayment of the loan
D.During which the economy’s overall output and employment expands and contracts
4)
Refer to the above table. Which product is a normal good but least responsive to a
change in income?
A.Product W
B.Product X
C.Product Y
D.Product Z
5) In corporations, owners are __________________ and managers are
________________.
A.agents; principals
B.stockholders; bondholders
C.agents; employees
D.principals; agents
6) If the real output of a DVC increases from $200 billion to $260 billion and its
population increases from 100 to 120 million, its real per capita output will have:
A.remained unchanged.
B.increased by about $167.
C.increased by about $55.
D.decreased by about $20.
7)
Refer to the above table. The rise in percentage of income received from before taxes
and transfers to after taxes and transfers is greatest for the:
A.Lowest 20% of households
B.Third 20% of households
C.Fourth 20% of households
D.Highest 20% of households
8) The “replacement rate” is the birthrate necessary to:
A.Keep a nation’s population from decreasing
B.Keep an able-bodied workforce in the economy
C.Maintain the productivity level in an economy
D.Maintain the standard of living of a nation
9)
Refer to the diagram. If a firm produces output Q1 at a unit cost of c, then the:
A.firm is operating in a purely competitive industry.
B.firm is maximizing profits.
C.marginal product per dollar’s worth of each resource employed is not the same.
D.firm is fulfilling the least-cost rule in employing resources.
10) Energy efficiency requires that we employ:
A.Only the lowest-cost energy inputs
B.Only domestic energy sources
C.A mix of energy inputs, some of which are more expensive than others
D.Imported energy inputs and save domestic resources for future use
11) “Price” in the statement of the Law of Supply refers to:
A.The amount that buyers are willing and able to pay for each unit of the product
B.The cost of producing each unit of the product
C.The total revenues that sellers receives for selling a given quantity of the product
D.The total amount that buyers pay in order to acquire a given quantity of the product
12) In a cap-and-trade program:
A.government fixes the price of pollution rights and firms choose how many permits to
purchase.
B.government fixes the maximum amount of a pollutant that firms can discharge and
issues permits that firms can buy from and sell to each other.
C.each firm is provided a fixed number of permits for a particular pollutant and no
individual firm is allowed to acquire additional permits.
D.firms can emit whatever type of pollutant they want, so long as the total tonnage does
not exceed a government-established quantity.
13) Answer the question based on the following payoff matrix for a duopoly in which
the numbers indicate the profit from either opening a coffee shop in a small town or not
opening the coffee shop.
Refer to the above table. If the firms are playing a sequential game, then
A.There is a dominant strategy for this game.
B.There is only one Nash equilibrium for this game.
C.There are two potential Nash equilibriums for this game.
D.Both firms will choose not to open a coffee shop.